Milwaukee Already Seeing Staggering Increase in Foreclosures for Sale in First Three Weeks of 2008

by Donald Hanz on Foreclosure Crisis

With experts everywhere predicting to see even more foreclosures for sale in 2008 than 2007, it seems that the first signs of this trend are proving them correct, especially in Wisconsin. The Milwaukee Journal Sentinel reports that during the first 3 weeks of 2008, over 1,000 foreclosures for sale have already been registered and scheduled in Milwaukee County, the most populated region of the state.

What’s really worrisome for Wisconsin residents here is that in all of 2007, only 2,850 foreclosures for sale were sold off. This was already a 60% jump over the totals for 2006, and not it seems that much like the rest of the country, Wisconsin is on track to shatter last year’s totals of foreclosures for sale as well.

Following the trend in which urban areas tend to be hit the hardest, roughly 87% of the foreclosures for sale scheduled in 2008 are in the city of Milwaukee. But every other suburban area in the county was hit with an increase in foreclosures for sale as well, demonstrating the spread of the foreclosure epidemic over all income brackets and neighborhoods.

2007 saw a dramatic increase in the number of suburban homes and properties in affluent communities turning into foreclosures for sale. Many relate this to investors who had bought up properties in the years before the housing market slump, hoping to turn them for a profit while home values and demand were still high. But now that home values have sunk incredibly low, and the market has been flooded with traditional home sales and foreclosures for sale alike, these investors are stuck with high mortgage payments on properties that show no signs of being sold for anything close to their original value in the near future. Therefore, for many investors, allowing their homes to be repossessed as foreclosures for sale ends up being cheaper than hanging on to them and paying off the mortgage in hopes of a sale.

And it seems that the market for foreclosures for sale is completely flooded as well, driving down prices even further. In Milwaukee County during 2007, 92% of foreclosure for sale ended up simply being awarded back to the lenders who first issued the mortgage. With lenders like banks and government agencies flooded with these homes, finding foreclosures for sale through these sources could be even more lucrative than simply buying them at auction. Banks are not in the business of selling property, they simply put up foreclosures for sale as a means of recollecting money. And with such a flooded inventory, it seems lenders are selling foreclosures for sale at very low prices simply to get a return and get rid of the properties.

Investors would be wise to take notice of this in Milwaukee and beyond, especially during 2008. If the foreclosure situation gets much worse, severe action will have to be taken to remedy the situation. While in 2007 many felt it couldn’t get much worse, many are predicting that 2008 will be the year in which the market bottoms out and prompts a recession in the economy. Keep a close eye on this situation. If you’re a homebuyer looking for a good price on a property, there may not be a better opportunity to save than the ones offered by foreclosures for sale for many years.